New Anti-Money Laundering Technology Sees UK Fraud Rings Frozen

Pay.UK’s Faster Payments team is today announcing the official launch of the anti-fraud Mule Insights Tactical Solution (MITS) following a successful pilot by participants of the UK’s real-time payment service.

This ground-breaking technology – developed by Vocalink, a Mastercard company – enables suspicious payments to be tracked as they move between bank and building society accounts regardless of whether the payment amount is split between multiple accounts, or those accounts belong to the same or different financial institutions. MITS creates a visual map of where and when money has moved, providing data driven insights and new intelligence for fraud teams to take action.

By bringing together payments data from multiple banks and overlaying it with cutting-edge proprietary analytics and algorithms, MITS can accurately pinpoint individual accounts (known as mule accounts) involved in suspected illegal activities. MITS will help the UK’s financial institutions detect and respond to criminal activity across the payments network, and has the potential to disrupt fraud and money laundering worth millions annually.

During the pilot, based on a limited number of suspicious transactions submitted for tracing to test MITS operational capability:

Thousands of UK accounts were subject to further investigation due to suspicious activity – a significant percentage of which were subsequently identified as mules.

Multiple, large, well-concealed money laundering rings were uncovered – where money was being moved between networks of accounts and institutions.

The insights offered by the new tracking service further reinforced banks’ fraud prevention processes, reducing the time necessary to identify and take action against suspected accounts.

Mules are required to launder funds fraudulently obtained as a result of authorised push payment (APP) fraud, phishing or malware scams. They are recruited by a variety of methods, including spam e-mails, adverts on genuine recruitment websites, approaches to people with their CVs available online, instant messaging and adverts in newspapers. Many may be unaware they are committing a criminal offence that can lead to severe penalties.

Now MITS is fully operational identification numbers are expected to increase as more suspicious transactions are submitted by banks and building societies for tracing.

Paul Horlock, Chief Executive of Pay.UK said: “This new initiative is a significant milestone in the UK’s fight against financial crime, giving the industry the potential to track the flow of illicit funds on a greater scale and with more speed and accuracy than ever before.

“The effective introduction of MITS can help to tackle money-laundering practices head-on and further disrupt criminal activity. Unfortunately there is no silver bullet to tackle fraud; by working in collaboration, financial institutions, Payment System Operators like ourselves, Government and law enforcement agencies all have an important role to play in helping to protect consumers. We believe this project can play an important role as one of the first stages in a cross-agency effort to disrupt the criminals who are responsible.”

MITS has been created by Vocalink, the infrastructure supplier for the Faster Payments service, as part of a package of measures released and under development by the industry to further protect consumers online. MITS is underpinned by Vocalink’s financial crime-fighting solution, AML Insights (Anti Money Laundering Insights), which uses advanced data science across payments data from multiple institutions to help them address the issue of money laundering and mule networks.

David Rich, Executive Vice President, Vocalink Services comments:“The innovative data science behind MITS enables us to spot and trace illicit accounts like never before. By bringing together payments data from multiple banks in a secure way, we are able to deliver a new kind of intelligence that analyses billions of transactions, connects the dots and then identify how the laundered money is split, layered and dispersed across the whole banking network. Banks are unable see the complete picture of the movement of stolen or illicit funds as they only have access to information within their own institution. This is showcasing industry collaboration at its very best.”

MITS provides yet another barrier to fraudsters and is a further step towards the industry’s wider goal of reimbursing victims of fraud who have had their money stolen. Unfortunately under current law once funds have been moved to an alleged scammer, the customer no longer has legal title to them. This generally means a court order is needed to return the funds – the finance industry is calling on the government and regulators to work with them to resolve this.

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